Consumer Federation of California

State regulators and Pacific Gas and Electric Co. have revived a $3 million settlement over the utility’s failure to produce gas-pipeline safety records after the San Bruno disaster – a fine that critics of the company denounced as too lenient.

PG&E initially reached the settlement with the commission last spring after the agency’s executive director, Paul Clanon, threatened to levy a fine of $1 million a day for each day the company failed to meet the March 15 deadline for disclosing pipeline records.

In the days before the deadline, PG&E trucked hundreds of thousands of pages of records from around the state to a temporary sorting center at the Cow Palace, where employees searched for records that would meet the commission’s mandate. Ultimately, PG&E was forced to admit there were some documents it simply couldn’t find.

The utilities commission wanted PG&E to prove it had documentation to support the levels at which it was running gas pipelines. That became an issue during the probe into the September 2010 explosion of a transmission line in San Bruno that killed eight people and destroyed 38 homes, when investigators learned that PG&E records about the pipeline described it incorrectly.

The $3 million fine was delayed last year, however, after commissioners raised questions about whether the deal would limit the agency’s regulatory power over PG&E. Outside critics, including Assemblyman Jerry Hill, a Democrat whose district includes San Bruno, said the fine was too small, and in the end, the settlement stalled.

Commissioner Mike Florio prodded both sides in January to resolve the matter. That prompted attorneys for the commission and the company to revive a narrower deal before the commission that simply says: "PG&E should pay the $3 million penalty provided for in the stipulation." The sum would be paid out of profits and not by PG&E customers.

"We came to this agreement with the commission staff last year, we met the terms of that agreement, and this finalizes that," said PG&E spokesman David Eisenhauer.

Although it would be the third-largest gas-related fine the commission has ever levied against PG&E, the $3 million penalty pales in comparison to what the company is likely to pay for other problems that contributed to the San Bruno disaster. Company executives said last week that they expected state fines for gas-safety and record-keeping deficiencies to top $200 million.

"The $3 million is irrelevant at this point – they are going to have cough up much more money to fix their mistakes," said Marcel Hawiger, an attorney with The Utility Reform Network, a customer-advocacy group.

Hill said the "backroom deal" is just as bad now as it was when it was reached last year.

"It created outrage because we felt the fine should be much more," Hill said. "But now we see it back as a done deal, with a minimal fine. It looks like the culture has not changed."